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Land-Use Regulation and the Credit Crisis
...Eicher’s research confirms my recent Cato policy analysis, The Planning Tax, which shows that growth-management planning has made housing unaffordable in a dozen or so states, particularly Hawaii, California, Florida, Maryland, Oregon, Washington, and most of the New England states. Meanwhile, housing remains pretty affordable in most other states, including the fast-growing states of Georgia, North Carolina, and Texas, because land-use planners have not yet seized power in those states.

In many cities, Eicher’s estimates of the cost of planning are very close to mine. For example, he estimates planning added $200,000 to the cost of a home in Seattle; my estimate was $180,000. For a detailed discussion of the differences between our two studies, see my blog, The Antiplanner.

Research by Harvard economist Edward Glaeser has shown that land-use regulation not only drives up housing prices, it makes them more volatile too — more prone to crashes. It was just such a bubble and subsequent crash in property markets that has laid the Japanese economy low for more than a decade.

Sadly, planning advocates are trying to convince legislatures and city councils in most states that don’t have growth-management planning to pass such legislation and write such plans. Those plans not only deny the American dream of homeownership to low- and moderate-income families, they put the U.S. economy increasingly at risk of a Japanese-style crash.